News

In China Terminal & Electric Corp. v. Willemsen, a Taiwanese corporation has asked the Supreme Court of the United States to review a decision of the Oregon Supreme Court recognizing that its courts have jurisdiction over the foreign manufacturer.  China Terminal & Electric (CTE) manufacturers battery chargers used in motorized wheelchairs sold by an Ohio corporation throughout the United States, more than a thousand of which were sold in Oregon during a two-year period of time.  Because CTE does not directly export its product to Oregon, it claims that the state violated its due-process rights by making it answer in court for the death of a woman who was physically incapable of escaping the in-home hospital bed she was in, when the battery charger allegedly sparked a fire that engulfed her bedroom and immolated her.  CCL, representing the estate and heirs of the deceased, filed a brief in opposition to CTE’s petition for certiorari, written by Robert S. Peck.  The brief argues that the Oregon Supreme Court properly followed the U.S. Supreme Court’s recent decision in J. McIntyre Machinery, Ltd. v. Nicastro (2011), in determining that the state courts had jurisdiction over CTE, that CTE’s agreement to hold the Ohio wheelchair manufacturer harmless and to be insured against any liability that might arise makes CTE liable for any judgment, whether or not it participates in the trial and therefore moots the due-process issue it seeks to raise, and that it is premature to revisit the Court’s Nicastro decision before many courts have had an opportunity to apply it.   The petition in the case is scheduled for review at the justices’ conference Jan. 18.

On December 17, 2012, CCL filed an amicus brief on behalf of the American Association for Justice and North Carolina Advocates for Justice in support of Respondent in the case of Delia v. E.M.A., now pending before the U.S. Supreme Court. The Delia case involves Medicaid liens placed on tort recoveries obtained by Medicaid recipients from liable third parties. Federal law prohibits state Medicaid agencies from placing liens on any portion of a recovery that does not represent compensation for past medical expenses. The issue in Delia is whether a state may evade that requirement by unilaterally deeming a significant portion of any settlement as repayment of medical expenses without any consideration of the facts surrounding a particular settlement. CCL’s amicus brief, authored by CCL Senior Litigation Counsel Louis Bograd, argues that the anti-lien provision of the federal Medicaid act requires that third-party recoveries be fairly and equitably allocated between past medical expenses and other types of damages. The brief describes how numerous states employ evidentiary hearings to allocate Medicaid settlements and notes that North Carolina itself uses such a procedure to allocate damages in workers’ comp cases. The Supreme Court will hear argument in Delia v. E.M.A. on January 8.

The American Association for Justice features CCL Litigation Counsel Valerie M. Nannery in a continuing legal education webinar on Medicare Secondary Payer issues.  Ms. Nannery discussed cases settled for less than the full value of the claims and how to assure that Medicare’s subrogation rights do not entirely preclude any recovery for the plaintiff, focusing her discussion on current and developing case law in this area, including the decision in Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010), a case in which CCL’s Robert S. Peck was counsel for the plaintiffs. 

On December 5, 2012, CCL Senior Litigation Counsel Louis Bograd argued the case of Morris v. Teva et al., before the United States Court of Appeals for the Fifth Circuit. Plaintiff Penny Morris developed tardive dyskinesia, a serious neurological disorder, as a result of her long-term use of the generic prescription drug metoclopramide manufactured by the defendants. In July 2004, the FDA approved a change to the label of Reglan, the brand-name form of metoclopramide, to add a bold-faced warning that “metoclopramide use should not exceed 12 weeks in duration.” Yet no manufacturer of metoclopramide ever communicated this new warning to Ms. Morris’s doctor, either through a Dear Doctor letter announcing the change or by publishing the revised warning in the Physician’s Desk Reference. The central issue in the Morris appeal is whether this failure to communicate a warning approved by the FDA distinguishes this case from Pliva, Inc. v. Mensing, in which the Supreme Court held that most failure-to-warn claims against generic drug manufacturers are preempted on grounds of impossibility. Here, federal law did not prohibit the defendants from notifying doctors of the new FDA-approved warning. Morris is one of a number of post-Mensing appeals currently being considered by various federal circuits.

The Mississippi Supreme Court held an extended, one-hour-and-thirty-minute oral argument in two consolidated appeals, Texaco, Inc. & Chevron Corp. v. Rosalyn Simon, No. 2010-CA-01921. CCL’s Andre M. Mura and Robert S. Peck both argued on behalf of the Plaintiffs/Appellees.

 In this appeal, Texaco and Chevron are challenging a jury verdict in favor of young adults and a child injured when, during the terms of their pregnancies, they were exposed to leaded gas that leaked from underground storage tanks. The jury found that Texaco was the owner of the tanks and gas and was negligent for failing to inspect or maintain the tanks. It awarded compensatory damages to be paid by Texaco and Chevron, which merged with Texaco in the 1990s. The evidence at trial demonstrated that Texaco had purchased the tanks from Sinclair Oil in the late 1960s; this sale of personal property did not implicate the statute of frauds (which only applies to the sale of land) and thus was proven through tax receipts, custom and practice evidence, and oral testimony. Evidence at trial also demonstrated that 78 percent of such tanks fail after 10 or 20 years of service. The tanks at issue in this case had been in service for decades when Texaco purchased them; yet Texaco never inspected or maintained them. Lastly, plaintiffs established at trial that exposure to leaded gas was the cause of their injuries. On appeal, Texaco has denied ownership of the tanks, and has challenged the probity of Plaintiffs’ causation evidence. Chevron has argued that the judgment should apply only to Texaco, because it has no presence in Mississippi and thus is outside the jurisdiction of its courts, and because, as a matter of corporate law, it should not be held liable for Texaco’s negligence.

In a November 28, 2012 article, The National Law Journal quoted CCL attorney John Vail on why a five-page, unsigned U.S. Supreme Court opinion reversing the Oklahoma Supreme Court in Nitro-Lift Technologies v. Howard represents a troubling trend in the Court's treatment of arbitration issues.  In the field of arbitration, the Court seems to issue per curiam opinions overturning state supreme court decisions that favored consumers regularly. 

Vail told the paper that the this approach trend was “is not really the court's role, and its resources are better devoted elsewhere."   The Court’s primary function is resolving conflicts on important issues in the lower courts and other doctrinal issues, not simply correcting errors. 

Vail has written previously about the way the Supreme Court has misinterpreted the Federal Arbitration Act to create a body of law that favors mandatory arbitration and threatens the fair and public resolution of consumer and employee claims.

On Nov. 29, CCL President Robert S. Peck spoke at an annual Consumer Attorneys of California continuing legal education seminar on the topic of taking a case to trial with an appeal in mind.  Peck emphasized that many cases are likely to result in an appeal and that it is just as important to prepare for that appeal during trial as it is to prepare the evidence for presentation before the jury.

The Pennsylvania Supreme Court on November 21, 2012 significantly expanded the scope of liability of nursing homes and other health care entities. Scampone v. Highland Park Care Cente, 2012 WL 5894904 (Pa. 2012), arose out of the death of a 94-year-old nursing home resident due to dehydration, malnutrition and neglect. Plaintiff alleged that the nursing home and its management company provided inadequate staffing and training. The jury awarded $193,500, and the appellate court affirmed, holding that the nursing home was sufficiently similar to a hospital to be subject to liability for hospital corporate negligence under Pennsylvania precedent.

The state Supreme Court affirmed on a somewhat broader ground. The proper inquiry was whether defendants had undertaken a duty to provide services to decedent and whether they did so negligently. The Court also rejected any special tort immunity “for the nursing home industry based upon appellants’ predictions of financial doom.” The court remanded to the trial court for a finding on these issues and a new trial.

AAJ filed a brief as amicus curiae, authored by CCL counsel Jeffrey White.

On November 15, 2012, CCL Senior Litigation Counsel Louis Bograd spoke at a mass torts seminar at the Ohio Association for Justice Mid-Winter meeting in Cleveland. Bograd’s speech, entitled Drug and Device Litigation: Understanding and Coping with the Supreme Court's Evolving Preemption Jurisprudence, reviewed the Supreme Court’s preemption jurisprudence over the past two decades with particular regard to its application to products liability claims against the manufacturers of products regulated by the FDA including medical devices, prescription and non-prescription drugs, and vaccines. Bograd advised the audience that attorneys litigating products liability and consumer protection claims involving products regulated by the FDA need to understand the reach and limits of the doctrine of FDA preemption as it applies to each regulated product.

The Supreme Court has handed big business a Get Out of Jail Free card, CCL lawyer John Vail today told the national convention of the Federalist Society, describing rulings under the Federal Arbitration Act that effectively shield large corporations from liability to consumers and employees.

Part of a panel on “The Roberts Court and Litigation Against Big Business:  Too Much, Too Little, or Just Right?” Vail provided an opposing view to panelists who claimed the Court is neutral in its business rulings.

Detailing the history and purpose of the Act, Vail demonstrated how the Court has created law that his little to do with the statute Congress wrote in 1923.  Vail noted that even former Justice Sandra Day O’Connor had found “the Court has abandoned all pretense of ascertaining congressional intent with respect to the Federal Arbitration Act, building instead, case by case, an edifice of its own creation.” 

Vail cited a recent decision by Justice Scalia, which quoted an earlier decision but left out a key word at the end of the quoted sentence.  “The original intent of the Act,” said Vail, “was to make the remedy of specific enforcement available for breaches of arbitration agreements.”  By selective quotation, Vail asserted, Justice Scalia had judicially created a national policy in favor of arbitration, something Congress never intended.